Profit motive vs. corporate responsibility

1. Profit motive vs. corporate responsibility LO: I will be able to define profit motive and corporate responsibility.

2. What is profit motive? • Individuals being provided incentive to relinquish something (e.g. capital, expertise, labour) for deployment to a productive purpose. • The concept of profit motive was first raised by Adam Smith to explain why rational actors should invest their personal resources and why they needed to be provided a rent for use of that capital. • The profit motive must be sufficiently high to incentivise owners of capital to deploy their capital, but not so high as to extract too much rent from the productive capacity of the economy. • See Milton Freeman for more information.

3. What are stake holders? • A person with an interest or concern in something. • For example, employees, employers, share holders.

4. What do we mean by corporate responsibility? • Responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. • The term "corporate social responsibility" came into common use in the late 1960s and early • An organization's mission as well as a guide to what the company stands for and will uphold to its consumers.

5. Examples of corporate responsibility • Argos • McDonalds • Star bucks • Tesco What do these companies do in terms of corporate responsiblity?